Broker fees for mortgages

E

edadam

Guest
in 2003 I took out a mortgage using a broker with IIB. I had reason to request a statement from IIB recently and discovered to my horror that I had been charges an arrangement fee of .5%. This .5% was added to my mortgage thus incurring interest. I called IIB and they told me that this was "the way we do it".

When I asked if I had dealt with them directly would I have been charged the arrangement fee they said no.

I went back to the broker who told me that at that time (2003) they received .5% from the lender and .5% from the customer as commission.

As this was nearly 2 years ago I am not certain but I'm sure I asked the question at the time "what will this cost me". I looked at my mortgage offer and the arrangement fee is on it. I just never noticed it before - probably because nobody mentioned it to me. Two things really piss me off...

IIB just lumped it onto my mortgage without telling me

I feel like the broker has screwed me.

Do I have any recourse in this ?
 
In a word - no. IIB (as far as I know) don't charge fees any more but they certainly used to add 0.5% if the broker requested it. The loan offer is a legal document and in signing it you accepted the terms and conditions.

Sarah

www.rea.ie
 
Hi Sarah,

I more or less guessed that I could do nothing. You mentioned that the broker could "request" that the .5% was added. Does this mean it was arbitrary ?
 
Thats a bit of a scald edadam.....I am dealing with them at the moment and dont want to get similarily burned.

Does anyone know of any pitfalls like this that are currently being used by lenders / brokers?
 
The 0.5% arrangement fee goes directly to the broker, in the past if a customer queried this IIB employees were not allowed to tell customers that the fee went directly to the broker they just had to say it was a standard charge or some other waffle.

Because it was on the signed loan offer theres nothing you can do about it now, unfortunately.....just dont use that broker again as the arrangement fee is charged at the brokers discretion!!!

Nowadays if the broker is charging the 0.5% arrangement fee through IIB, the loan offer will clearly state this in the special conditions of the loan offer (very back page) It will also tell you how much this will be on the front page of the loan offer. To be honest very few brokers charge it now because they have to say it goes to them.
 
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